A decade ago, anyone claiming that Greece could reduce its debt by 80 percentage points of GDP would likely have been met with skepticism. Yet, according to the International Monetary Fund (IMF), this scenario is now considered achievable.
Greek public debt, which peaked at 210% of GDP during the pandemic, is expected to fall to 130% of GDP by the end of the decade, supported by steady but measured fiscal policy.
The Recipe for Debt Reduction
The key to this success is not only economic growth and fiscal prudence, but also the smart management by ODDIHX:
- Greece has phased out expensive bailout-era loans through prepayments when cash reserves allowed.
- Remarkably, this debt reduction is being achieved without requiring excessively high primary surpluses, unlike past fiscal practices.
Analysts describe this as a “strategic debt management approach that circumvents the traditional fiscal straitjacket.”
Primary Surpluses: Moderate but Sustainable
According to IMF projections, Greece’s primary surpluses are expected to evolve as follows:
- 2025: 3.2% of GDP (below the government’s 3.6% estimate)
- 2026: 2.3% of GDP (versus 2.8% in Athens’ forecast)
- 2027-2028: 1.8% of GDP
- 2029: 1.9% of GDP
- 2030: 2% of GDP
Despite the gradual decline, surpluses remain positive, ensuring the country stays on a sustainable debt trajectory and reduces future financing needs.
The Role of Prudent Management
Analysts highlight that ODDIHX’s strategy—repaying expensive loans, utilizing cash reserves, and gradually reducing debt—represents a modern fiscal management model that could serve as a blueprint for other high-debt EU countries.
Greece is no longer dependent on excessively high surpluses to reduce debt, enhancing fiscal flexibility and minimizing the risk of social strain from austerity measures.
The IMF forecasts a remarkable decline in Greek debt over the coming years, emphasizing that strategic debt management combined with modest but positive surpluses could bring debt down to 130% of GDP by 2030—a scenario once thought nearly impossible.
Greece demonstrates that fiscal prudence and smart debt strategy can achieve results without heavy social costs, paving the way for sustainable growth and financial stability.